Creating Value And Lessons From The Front Lines

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Creating Value And Lessons From The Front Lines

• Michael Clauss
• Mclauss_at_frymulti.com
• Daniel Herb
• Daniel.herb_at_valuestoaction.com

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Agenda

• Goal To deliver concepts and examples of how to
  create and/or increase value.
• Introduction
• Where we fit (lets drop this as a point in the
  slide)
• Models
• Strategies
• Tools
• Case and Point
• Closing remarks

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Where We Fit
Large
DH
MJC
Process
Operational
Small
4
Need is Key
5
Balanced Scorecard

• Financial Perspective
• Goals Measures
• Innovation and Learning Perspective
• Goals Measures

• Customer Perspective
• Goals Measures
• Internal Perspective

• Goals Measures

6

• Financial Perspective
• Innovation and Learning Perspective

How do Shareholders see us?
How do Customers see us?

• Customer Perspective Internal
  Perspective

What must we Excel at?
How do we create more value?
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Personal Finance Software
Quicken
High
MS Money
Relative Level
Pencil
Low
Price
Ease of Use
Features
Speed
Accuracy
8
Forces shaping commercialization strategy

• Change in
• Technology/skills
• What new skill sets are needed
• to develop and manage the
• technology?
• How are these skills different
• than the companies current
• skill set?

• Change in customers
• What new customer segments
• emerge with the new technology?
• How do the needs of those
• customers differ from traditional?
• Is there a way to ease a
• transition for traditional customers?

Change in strategy

• Change in
• Complementary assets
• What complementary assets are
• currently valuable to the firm?
• Which assets will retain their
• value with new technology
• advances?
• What new complimentary
• assets are required?

• Change in competitors
• What new competitors from
• different industries are likely to
• enter this market?
• How do their capabilities/assets
• differ from traditional competitors?

Wharton on Managing Emerging Technologies
9
Drivers of market growth

• Actual and expected
• growth in demand
• Growth toward market
• Potential
• Economic and demographic
• expansion of potential
• Expansion of market potential
• (new uses, new users, etc)

Perceived Relative Advantage Relative value
perceived benefits- costs Fit with market
segment needs Perceived risks
Collective investments in availability
Real price changes
Collective investments in innovation

• Stimulation of
• Competitive activity
• Preemption of untapped
• Potential
• Intention to gain or hold
• Advantage
• Defensive reactions by
• incumbents

Wharton on Managing Emerging Technologies
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3 Areas of Focus 4 Ways to Create Value
Information
Entertainment
- Customer - Market - Brand/Value Proposition
Convenience
Savings
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Value Exchange and Contextual Relevance
Fry Multimedia

• Products and services have to be contextually
  relevant to customers
• Create differentiated value exchange with
  customers

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Value Curve
Reduce
New Value Curve
Eliminate
Create
Raise
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Tools

• Game Theory
• Balanced Scorecard
• Pivot and Hammer

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Concept

• Diverse wireless applications
• Concepts turned into Commercially viable value
• 802.11 _at_ Starbucks
• Value Proposition poorly defined- Value add?
• Pricing and model poorly implemented
• RF Transponders Speedpass _at_ Mobil
• Value Proposition well thought through
• Response shows viability

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Concept

• Automation
• Concepts turned into Commercially viable value
• Personalization- ease of use
• Filters- maximize time
• Agents- do work for you
• Barriers
• Acceptance curve
• Needed Conveinience outweighing trust

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Concept

• Micropayments
• Concepts turned into Commercially viable value
• Payment bundling- easier recording
• Increased usability- sign up once, use
  ubiquitously
• Barriers
• Subscription model
• Critical mass

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Concept

• DVX v. Netflix
• Ceiva v. traditional picture frame
• Differentiator in model
• Internet as a control panel

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Concept

• 3G shows potential
• Have to increase avg billings
• Cust ac in Cellular between 160 and 350
• Monthly avg 60, need to increase to 86
• Customer ac costs increase/CPGA cost per gross
  add
• Issues-need- education, triple tap, safety

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Concept

• Photography Digital v. Traditional
• Concepts turned into Commercially viable value
• New players
• New models- New value propositions
• Need for both

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Challenges for Photography firms

• Transition from halide to digital
• Significant
• New distribution channels computer stores and
  camera shops
• Film manufacturing has less value
• New complementary products needed software
• Significant
• New customers internet users
• New uses/needs transmission of images, posting
  on web pages, etc
• Significant
• New strong competitors from CE,
• Software, and graphic design, as well as
  start ups
• Internet speed new competitive dynamic

• Transition/Dimension
• Change in complementary
• assets and technologies
• Change in customers
• Change in competitors

Wharton on Managing Emerging Technologies